In Inmo Empire we bring you the definitive guide to optimize your tax returns as a rental property owner. Taxing? Deduce? Both concepts have no secrets for us!
Understanding the difference between tax relief and tax deduction is key in the tax world. Both terms imply subtracting taxes from the tax base, but with important nuances. While deducting involves subtracting the total amount paid, deducting involves subtracting a portion, generally expressed as a percentage.
For example, when considering an inheritance received of €50,000, if we deduct the €5,000 spent on the funeral of the deceased, the taxable income is reduced to €45,000. On the other hand, when making a deductible donation on our income tax return, we subtract a specific percentage of that donation, not its total amount.
In the context of renting your property, tax deductible refers to the expenses that you can subtract from the gross annual amount received from your tenant, such as mortgage interest, community fees, property tax, etc. In the meantime, deducting rent involves applying a percentage to the taxable income after deducting the deductible expenses.
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Interested in getting the most out of your property? Click now and contact us to join the nation’s top-rated homeownership platform! Your pocket will thank you.
